The commercial storefronts in Lowell’s core commercial district continue to have a distressingly high rate of vacancy, and the businesses that fill them tend towards short tenures. And yet, the downtown residential market continues to thrive – we had a builder in front of our board last night who wants to build a glass tower full of $700,000 condos.* Developers have been elbowing each other out of the way for years to develop our remaining mill space into condos. The downtown office market is not as hot as the residential market, but is doing just fine.

Meanwhile, the city’s neighborhood commercial districts, whose condition 20 years ago was accurately depicted in the first scene of The Fighter, which had long been even more troubled than the downtown, are thriving. Similarly, the city’s regional retail districts are also doing quite well.

What does this all add up to? How can the downtown be a retail, and only retail, black hole while the rest of the city’s retail sector, and the downtown’s residential sector, boom?

*And a restaurant on the first floor. I questioned the developer about his business plan, and he made it clear that he expects to make little money on the commercial space, or even to subsidize it. The role of the commercial space is to make the residential space more attractive for the building’s residents.

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I don’t know about downtown Lowell, but downtown Jenkintown, PA, has similar problems. The answer may reside in the nature of retail today…there are far fewer “mom and pop” stores and far more franchises and stores with corporate business plans. Their requirements include parking, certain minimum amounts of space, and negotiated lease deals. What had been a small brewery/restaurant started in Newark, DE, now has 12 or 14 locations. They looked at our town, and only the space requirements were sufficient. The leases were still over $20/s.f., at least in the high-demand downtown (at the time), and they demanded $12-14/s.f., which the landlords were not willing to give them. They also wanted an expansion of municipal parking, because the property only had street parking.

There are a number of other challenges to downtown retail at that scale, but a key challenge is scale. We don’t have the space for, nor want, big box stores.

How about absentee landlords? That’s another problem we have, because many have owned the smaller buildings for decades and have since moved to Florida or far away. The borough cannot get them to keep their spaces leased. In one case, they wanted to sell a poorly maintained commercial space and could not get the money they wanted, so they just left it empty waiting for a buyer.. Commercial centers tend to be run by managing agents who stay on top of leases and occupancy. We have some of those north of town, and they replace tenants very quickly….just a guess, don’t know.